AB & Co.

Audit for the year ending March 31, 2020

Payroll

Purpose
The purpose of this workpaper is to check that Payroll expense is not materialy misstated.

Procedure
1 Obtained Payrool register, aatandance details, Leave register for a Particular month
2 Reviewed Payrool register for accuracy of salary computation and disbusrement, also verified the salary disbusrment as per the ban
3 Traced salaries of sample employees from the salary slip issued
4 Traced attandance of employees and leave leave details and balance to ensure the correctness of salary disbursed. Also verifed fake
5 Obtained the headcount reconcilation along with the list of joinees resignees
6 Tested the joinees and resinees in detail on a sample basis
7 Determined and expectation of the salary exp for the year and compared it with the amount recorded
8 Obtained the acturial valuation report for gratuty and leave encashment exp and also verified the data sent to acturary

Conclusion
The account balance is fairly stated.
ary disbusrment as per the bank advice

y disbursed. Also verifed fake employees if any

sent to acturary
ABC Chartered Accountants
XYZ Ltd.
Statutory Audit for the year ended 31st March , 2020

Trial Balance for the Financial Year 19-20

GL Code GL Name Debit Credit

1001 Equity Share Capital 1,000,000

1002 Creditors 3,650,000
1003 Provision for Gratuity 35,000,000 To be Tested
1004 Provision for Leave Encashment 2,500,000 To be Tested
2001 Buildings 1,000,000
2002 Office Equipments 1,000,000
2003 Debtors 5,000,000
2004 Bank 6,400,000
3001 Revenue Income 2,000,000
3002 Interest Income 1,000,000
4001 Legal & Professional Expenses 9,000,000
4002 Printing & Stationery Expenses 270,000
4003 Travelling Expenses 90,000
4004 Repairs & Maintenance 2,500,000
4005 Salary 19,540,000 To be Tested
4006 Gratuity Expense 200,000 To be Tested
4007 Leave Encashment Expense 150,000 To be Tested

Total 45,150,000 45,150,000

Payroll Register for the month of Mar'20

Review Salary Register for accuracy, Check Salary slips and check disbursement

Name Employee ID Department Designation Month

Darshana Bhandari 67819 Finance AM March' 20

Aswin Kumar Dash 32779 Marketing Manager March' 20
Uma Puri 79421 Marketing DM March' 20
Tarang Chaudhry 36087 Marketing Sr. Manager March' 20
Meenakshi Thakkar 44398 Operations Manager March' 20
Ashutosh Saran 19243 Operations Exec March' 20
Ivy Chakravarty 33767 Finance AM March' 20
Smita Gupta 90064 Finance Sr. Manager March' 20
Kalyani Chakraborty 28406 R&D DM March' 20
K. Anuradha Rao 50968 R&D Exec March' 20
Nisha Gupta 11002 HR Exec March' 20
Sharmishtha Sanyal 44024 HR Exec March' 20
Jyoti Hirani 18982 HR AM March' 20
Namrata Prasad 81839 R&D DM March' 20
Fateh Singh Gangani 62120 Admin AM March' 20
Avantika Mathur 54326 Admin Exec March' 20
Vineeta Prakash 53255 Admin Exec March' 20
Shweta Sharma 45774 Production Manager March' 20
Shivani Khazanchi 66750 Production Sr. Manager March' 20
B. Jayshree 97249 Production AM March' 20
 Total
Medical Transport Employer
Basic D.A (Basic + H.R.A Total
Allowance Allowance PF Cont.
DA)

82,600 4,130 86,730 19,824 75 7,560 114,189 10,408

85,100 4,255 89,355 20,424 75 7,560 117,414 10,723
73,400 3,670 77,070 17,616 75 7,560 102,321 9,248
82,400 4,120 86,520 19,776 75 7,560 113,931 10,382
77,900 3,895 81,795 18,696 75 7,560 108,126 9,815
73,400 3,670 77,070 17,616 75 7,560 102,321 9,248
66,000 3,300 69,300 15,840 75 7,560 92,775 8,316
80,000 4,000 84,000 19,200 75 7,560 110,835 10,080
60,400 3,020 63,420 14,496 75 7,560 85,551 7,610
80,000 4,000 84,000 19,200 75 7,560 110,835 10,080
66,000 3,300 69,300 15,840 75 7,560 92,775 8,316
71,300 3,565 74,865 17,112 75 7,560 99,612 8,984
87,400 4,370 91,770 20,976 75 7,560 120,381 11,012
58,600 2,930 61,530 14,064 75 7,560 83,229 7,384
66,000 3,300 69,300 15,840 75 7,560 92,775 8,316
56,900 2,845 59,745 13,656 75 7,560 81,036 7,169
55,200 2,760 57,960 13,248 75 7,560 78,843 6,955
66,000 3,300 69,300 15,840 75 7,560 92,775 8,316
55,200 2,760 57,960 13,248 75 7,560 78,843 6,955
55,200 2,760 57,960 13,248 75 7,560 78,843 6,955
 Deductions
Grand Total LWP/ Mid Net Amt
(Gross Salary) Employee Employer TDS Month
Total Paid Check Salary
PF Cont PF Cont. Ded. Slip- High
Joining
Value Basis
124,597 10,408 10,408 12,658 33,473 91,123 Salary Slip
128,137 10,723 10,723 17,758 39,203 88,933
111,569 9,248 9,248 16,134 34,631 76,939
124,313 10,382 10,382 15,273 36,038 88,276
117,941 9,815 9,815 15,098 34,729 83,213
111,569 9,248 9,248 12,354 30,851 80,719
101,091 8,316 8,316 15,260 31,892 69,199
120,915 10,080 10,080 11,576 7,801 39,537 81,378
93,161 7,610 7,610 17,940 33,161 60,001
120,915 10,080 10,080 10,239 30,399 90,516
101,091 8,316 8,316 14,735 31,367 69,724
108,596 8,984 8,984 - 14,012 31,980 76,616
131,393 11,012 11,012 15,805 37,830 93,564 Salary Slip
90,613 7,384 7,384 10,488 25,255 65,357
101,091 8,316 8,316 15,789 32,421 68,670
88,205 7,169 7,169 10,053 24,392 63,814
85,798 6,955 6,955 17,839 31,749 54,049
101,091 8,316 8,316 12,122 28,754 72,337
85,798 6,955 6,955 14,015 27,925 57,873
85,798 6,955 6,955 15,353 29,263 56,535

Total Salary Disbursed for the Month 1,488,834

Salary Disbursed as per Bank Advise 1,488,834

Diff (0)
Check for Fake Employees through attendance and leaves and check for LWP deducted for leaves exceeding the balance

Month
Attendance Sheet Template March Mon Tue

Sl# Employee Name Emp ID Department Designation 1-Mar 2-Mar

1 Darshana Bhandari 67819 Finance AM P P

2 Aswin Kumar Dash 32779 Marketing Manager P P
3 Uma Puri 79421 Marketing DM P P
4 Tarang Chaudhry 36087 Marketing Sr. Manager A P
5 Meenakshi Thakkar 44398 Operations Manager P A
6 Ashutosh Saran 19243 Operations Exec P A
7 Ivy Chakravarty 33767 Finance AM P P
8 Smita Gupta 90064 Finance Sr. Manager P P
9 Kalyani Chakraborty 28406 R&D DM P P
10 K. Anuradha Rao 50968 R&D Exec P P
11 Nisha Gupta 11002 HR Exec P P
12 Sharmishtha Sanyal 44024 HR Exec
13 Jyoti Hirani 18982 HR AM A A
14 Namrata Prasad 81839 R&D DM P P
15 Fateh Singh Gangani 62120 Admin AM P P
16 Avantika Mathur 54326 Admin Exec P P
17 Vineeta Prakash 53255 Admin Exec P L
18 Shweta Sharma 45774 Production Manager P P
19 Shivani Khazanchi 66750 Production Sr. Manager P P
20 B. Jayshree 97249 Production AM P P
Daily Employee Strength 17 15
exceeding the balance

Wed Thu Fri Sat Sun Mon Tue Wed Thu

3-Mar 4-Mar 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar

TR TR TR P P P P
TR TR TR P P P P
TR TR TR P P P P
P P P P P P P
P P P P P SL P
P P P P P P P
P L P P P P P
P P P P P P P
EL P P P P L P
P P P P P P P
P SL P P P P P
P P
A A A A A A A
P P P P A P P
P P P P P P P
P A P P P P P
P P P P P P P
P P P L P TR TR
P P P P P P P
P P P P P P P
14 12 15 0 0 17 17 16 18
 March
Fri Sat Sun Mon Tue Wed Thu Fri

12-Mar 13-Mar 14-Mar 15-Mar 16-Mar 17-Mar 18-Mar 19-Mar

P P P P P P
P P P P P P
P P P A P P
P P P P P P
P P L P P P
P P P P A P
P P P P P P
P A A A A A
P P P P P P
P P P P P P
P P P P P P
P P P P P P
A A A A A A
P P P P P P
P SL SL P A P
P P P P P A
P P P P P P
TR EL EL A P P
P P P P A P
P P P P P P
18 0 0 16 15 16 15 17
 Sat Sun Mon Tue Wed Thu Fri Sat

20-Mar 21-Mar 22-Mar 23-Mar 24-Mar 25-Mar 26-Mar 27-Mar

P FH P P P
P FH P P P
P FH P P P
EL FH P P P
P FH A P P
P FH P P A
P FH P P P
A FH A A P
P FH P P P
P FH L P P
P FH P EL P
P FH P P P
A FH A A A
L FH P P P
P FH P P P
P FH P P P
P FH P P P
P FH P P P
P FH P P P
A FH P P P
0 0 15 0 16 17 18 0
 Sun Mon Tue Wed
Casual
Sick
28-Mar 29-Mar 30-Mar 31-Mar Present Leave/ Late
Leave
Absent
L P P 18 0 1 0
P P P 19 0 0 0
P P A 17 2 0 0
P P P 20 1 0 0
P P P 18 2 1 1
P P P 19 3 0 0
P P P 21 0 0 0
P P P 14 8 0 0
P P P 20 0 1 0
P A P 20 1 1 0
A P P 19 1 0 1
P P P 15 0 0 0
A A A 0 22 0 0
P A P 19 2 1 0
P P P 19 1 0 2
P P P 20 2 0 0
P P P 21 0 0 0
P P P 15 1 1 0
P P P 21 1 0 0
A P P 20 2 0 0
0 16 17 18 0 0
 Summary
Earned Festive Opening Closing
Training
Leave Holiday Balance Balance

0 3 1 7 6.5
0 3 1 6 6
0 3 1 6 4
1 0 1 3 1
0 0 1 6 2.5
0 0 1 7 4
0 0 1 4 4
0 0 1 6 -2
1 0 1 4 2.5
0 0 1 6 4.5
1 0 1 3 0
0 0 1 0 0
0 0 1 0 -22
0 0 1 7 4.5
0 0 1 5 2
0 0 1 2 0
0 0 1 7 7
2 3 1 6 2.5
0 0 1 4 3
0 0 1 5 3
Payroll Register for the month of Mar'19

Name Employee ID Department Designation Month

Darshana Bhandari 67819 Finance AM March' 19

Aswin Kumar Dash 32779 Marketing Manager March' 19
Uma Puri 79421 Marketing DM March' 19
Tarang Chaudhry 36087 Marketing Sr. Manager March' 19
Meenakshi Thakkar 44398 Operations Manager March' 19
Ashutosh Saran 19243 Operations Exec March' 19
Ivy Chakravarty 33767 Finance AM March' 19
Smita Gupta 90064 Finance Sr. Manager March' 19
Kalyani Chakraborty 28406 R&D DM March' 19
Jyoti Hirani 18982 HR AM March' 19
Namrata Prasad 81839 R&D DM March' 19
Fateh Singh Gangani 62120 Admin AM March' 19
Avantika Mathur 54326 Admin Exec March' 19
Vineeta Prakash 53255 Admin Exec March' 19
Shweta Sharma 45774 Production Manager March' 19
Shivani Khazanchi 66750 Production Sr. Manager March' 19
AB Gupta 87634 HR Exec March' 19
BK Jain 12738 R&D AM March' 19
B. Jayshree 97249 Production AM March' 19
 Grand
Total
Medical Transport Employer Total
Basic D.A (Basic + H.R.A Total
Allowance Allowance PF Cont. (Gross
DA)
Salary)
74,340 3,717 78,057 17,842 75 7,560 103,534 9,367 112,900
76,590 3,830 80,420 18,382 75 7,560 106,436 9,650 116,086
66,060 3,303 69,363 15,854 75 7,560 92,852 8,324 101,176
74,160 3,708 77,868 17,798 75 7,560 103,301 9,344 112,646
70,110 3,506 73,616 16,826 75 7,560 98,077 8,834 106,911
66,060 3,303 69,363 15,854 75 7,560 92,852 8,324 101,176
59,400 2,970 62,370 14,256 75 7,560 84,261 7,484 91,745
72,000 3,600 75,600 17,280 75 7,560 100,515 9,072 109,587
54,360 2,718 57,078 13,046 75 7,560 77,759 6,849 84,609
78,660 3,933 82,593 18,878 75 7,560 109,106 9,911 119,018
52,740 2,637 55,377 12,658 75 7,560 75,670 6,645 82,315
59,400 2,970 62,370 14,256 75 7,560 84,261 7,484 91,745
51,210 2,561 53,771 12,290 75 7,560 73,696 6,452 80,148
49,680 2,484 52,164 11,923 75 7,560 71,722 6,260 77,982
59,400 2,970 62,370 14,256 75 7,560 84,261 7,484 91,745
49,680 2,484 52,164 11,923 75 7,560 71,722 6,260 77,982
50,000 2,500 52,500 12,000 75 7,560 72,135 6,300 78,435
78,300 3,915 82,215 18,792 75 7,560 108,642 9,866 118,508
49,680 2,484 52,164 11,923 75 7,560 71,722 6,260 77,982
 Deductions
Net Amt
Employee Employer LWP if Total Paid
TDS
PF Cont PF Cont. any Ded.
9,367 9,367 12,658 31,392 81,509
9,650 9,650 17,758 37,059 79,028
8,324 8,324 16,134 32,781 68,395
9,344 9,344 15,273 33,961 78,684
8,834 8,834 15,098 32,766 74,145
8,324 8,324 12,354 29,001 72,175
7,484 7,484 15,260 30,229 61,517
9,072 9,072 11,576 7,070 36,790 72,797
6,849 6,849 17,940 31,639 52,970
9,911 9,911 15,805 35,627 83,390
6,645 6,645 10,488 23,778 58,536
7,484 7,484 15,789 30,758 60,988
6,452 6,452 10,053 22,958 57,190
6,260 6,260 17,839 30,358 47,624
7,484 7,484 12,122 27,091 64,655
6,260 6,260 14,015 26,534 51,448
6,300 6,300 12,134 24,734 53,701
9,866 9,866 15,673 35,405 83,103
6,260 6,260 15,353 27,872 50,110

Total Salary Disbursed for the Month 1,251,963

Headcount Movement during the year

Particulars Date No. of Employees Audit Testing

Opening 1-Apr-19 19 Verified from Salary Register of Mar'19
Additions during the year 3 Verified from Joinees Details
Resignees during the year 2 Verified from Resignees Details
Closing 31-Mar-20 20 Verified from Salary register of Mar'20

Additions
Employee Name Emp ID Department Designation
K. Anuradha Rao 50968 R&D Exec
Nisha Gupta 11002 HR Exec
Sharmishtha Sanyal 44024 HR Exec

Resignees
Employee Name Emp ID Department Designation
AB Gupta 87634 HR Exec
BK Jain 12738 R&D AM
Date of Joining
5-May-19
6-Jul-19
5-Mar-20 Sample Tested

Date of Leaving
28-Feb-20 Sample Tested
5-Mar-20
ABC Ltd.
Year ending March 31, 2020

Audit Steps

1. Obtained the list of Joinees during the period of April'19 to March'20.

2. Samples were selected on judgemental basis.
3. Obtained the appointment letter for the above selections and verified that the same is approved by the management and accepted by the em
4. Ensured that salary is being processed proportionately as per the appointment letter in the month of joining.

Test of Details - New Employees

Employee_Cod
S.No. Employee_Name Date of Joining Designation Department
e

Sharmishtha
1 44024 10-Mar-20 Exec HR
Sanyal
Date of joing wrongly taken in payrool sheet as 5-03-2020
e management and accepted by the employee.

From Appointment Letter

Annual Entitlements
Provident Fund
Medical Transport Total CTC (Monthly) as per
Basic Pay DA HRA (Employer
Allowance Allowance appointment Letter
Cont.)
<<Refer
<<Refer Formula>>
Formula>>
17,112 8,984
71,300 3,565 75 7,560 108,596
 31-Mar-20 Deductions
Expected Salary for Expected Salary
No of Days worked in the PF Deduction PF Deduction
the month of Payment for the
month of Joining Employee Employer
Joining month of Joining
<<Refer <<Refer
Formula>> Formula>>
22 77,068 8,984 8,984 59,100
As Per
Salary Difference Observation
sheet
<<Refer
Formula>>
76,616 17,515
Excess salary paid. The same should be recoverd from future payments
ABC Ltd.
Year ending March 31, 2020

Audit Steps

1. Obtained the list of resignees during the period of Apr'19-Mar'20.

2. Selections were made on judgemental basis and full and final data of them was obtained.
3. Verified that the employee had complied with all the separation formalities as laid in the company's policy.
4. Ensured that salary was processed proportionately in the month of resigning.
5. Ensured that full and final payment / recovery to / from the resignee is settled.

Test of Details - Resignees

Employee
S No. Name Designation Department
Code No.

1 87634 AB Gupta Exec HR

id in the company's policy.

Date of Notice Estimated date Short Notice Period

Date of Resignation Letter
Leaving Period of relieving Served
<<Refer
<<Refer Formula>>
Formula>>
1-Jan-20 28-Feb-20 2 Months 28-Feb-20 -
Traced to Full & Final Settlement
Wherther relieving
Basic LTA Medical Bonus Gratuity Gross Total
was approved
<<Refer Formula>>
Yes 50,000 10,000 5,000 25,000 100,000 190,000
TDS Net Pay
<<Refer
Formula>>
5,000 185,000
ABC Ltd.
Year ending March 31, 2020

Salary - Reconciliation

Materiality 4,000,000
Performance Materiality 2,800,000
CTT 900,000
Risk (Not Significant) and
Basis Taken
Relying on Controls

Salary and wages for FY18-19 (as per signed financials) 15,000,000
Add: Impact of Joinees 2,345,681 <Refer Link>
Less: Impact of Resignees (192,936) <Refer Link>
Add: Impact of Increment (Approx 10% on average) 1,500,000
Total salary for the year 18,652,746

Salary expense as per TB 19,540,000

Difference 887,254
Difference - % 4.54% Immaterial?

Joinees Impact

Employee Name Emp ID Department

K. Anuradha Rao 50968 R&D
Nisha Gupta 11002 HR
Sharmishtha Sanyal 44024 HR

Resignees Impact

Employee Name Emp ID Department

AB Gupta 87634 HR
BK Jain 12738 R&D
Refer Link>
Refer Link>

31-Mar-20
Expected
Date of Monthly Salary No. Of Months Salary for
Designation Joining with Emoluments Effective Year
Exec 5-May-19 120,915 11 1,338,126
Exec 6-Jul-19 101,091 9 909,819
Exec 5-Mar-20 108,596 1 97,736
Total 2,345,681

31-Mar-20

Salary
Monthly Salary No. Of Months Expectation
Designation Date of Leavingwith Emoluments Effective to be Reduced
Exec 28-Feb-20 78,435 1 86,279
AM 5-Mar-20 118,508 1 106,657
Total 192,936
XYZ Ltd.
Audit for the year ending March 31, 2020

Checking of data sent to actuary and relevant assumtions taken by

actuary for determining the liability on account of leave encashment and
gratuity payable to employees as at March 31, 2020

Summary

As per Calculation As per Actuarial

Particulars Certificate
Gratuity/LE As per Actuary
Number of employees 20 20.00
Monthly Qualifying salary (in Lakhs) 14.69 14.69
Average age of employee 42.04 42.05
Average Past service 8.56 8.56
Remaining working life 17.96 17.95
Discounting rate 8.20% From RBI website 8.20%
Average
Salary increment rate 8.00% Increment Rate of
Company 8.00%

Acturial Data Verification

Traced to Employee Master Data

S. No. Emp Code Employee Name BIRTH

1 67819 Darshana Bhandari 28-Nov-74
2 32779 Aswin Kumar Dash 19-Mar-89
3 79421 Uma Puri 7-Jul-68
4 36087 Tarang Chaudhry 17-Jan-77
5 44398 Meenakshi Thakkar 6-Sep-75
6 19243 Ashutosh Saran 13-Oct-86
7 33767 Ivy Chakravarty 31-Jan-72
8 90064 Smita Gupta 12-Mar-89
9 28406 Kalyani Chakraborty 21-Jul-86
10 50968 K. Anuradha Rao 1-Mar-77
11 11002 Nisha Gupta 27-Mar-67
12 44024 Sharmishtha Sanyal 10-Mar-75
13 18982 Jyoti Hirani 24-Jan-77
14 81839 Namrata Prasad 6-Apr-65
15 62120 Fateh Singh Gangani 20-Jul-63
16 54326 Avantika Mathur 20-Oct-77
17 53255 Vineeta Prakash 23-Sep-83
18 45774 Shweta Sharma 25-Jul-84
19 66750 Shivani Khazanchi 15-Jan-85
20 97249 B. Jayshree 5-Feb-88
20 Grand Total
 Difference
-
-
(0)
(0)
0
0%

0%

31-Mar-20 Age of Retirement - 60 years

Traced to
Mar'20 Salary
Employee Master Data Rx Rx Sheet
Age as on DATE OF Average (Basic +DA)
31-Mar-2020 APPOINTM Average Past Remaining Salary as on
(years) ENT Service (years) Life Mar'20
45.37 18-Aug-09 10.62 14.63 86,730
31.05 1-Feb-11 9.17 28.95 89,355
51.77 26-Dec-04 15.27 8.23 77,070
43.23 12-Jul-11 8.73 16.77 86,520
44.60 1-Aug-11 8.67 15.40 81,795
33.49 21-Dec-11 8.28 26.51 77,070
48.20 24-Jan-12 8.19 11.80 69,300
31.07 28-Jun-12 7.76 28.93 84,000
33.72 24-Dec-12 7.27 26.28 63,420
43.11 5-May-19 0.91 16.89 84,000
53.05 6-Jul-19 0.74 6.95 69,300
45.09 5-Mar-20 0.07 14.91 74,865
43.21 13-Feb-09 11.13 16.79 91,770
55.02 22-Feb-07 13.11 4.98 61,530
56.74 14-Feb-07 13.13 3.26 69,300
42.47 8-Jan-09 11.23 17.53 59,745
36.55 13-Feb-09 11.13 23.45 57,960
35.71 14-Jun-11 8.80 24.29 69,300
35.23 5-Aug-11 8.66 24.77 57,960
32.17 6-Dec-11 8.32 27.83 57,960
42.04 8.56 17.96 1,468,950
To be Verified from Leave Register

Leave Data as on 31-Mar-20

Vlookup from
Leave Balance Diff
Leave Register

6.50 6.5 0.00

6.00 6 0.00
4.00 4 0.00
1.00 1 0.00
2.50 2.5 0.00
4.00 4 0.00
3.50 4 -0.50
0.00 -2 2.00
2.50 2.5 0.00
4.50 4.5 0.00
0.00 0 0.00
0.00 0 0.00
0.00 -22 22.00
4.50 4.5 0.00
2.00 2 0.00
0.00 0 0.00
6.50 7 -0.50
2.50 2.5 0.00
3.00 3 0.00
3.00 3 0.00
56